Amazon urges local bookstores to sell Kindles

By Amy DustoAssociate Editor

Those stores can receive commissions for selling e-books through Kindles.

Amazon.com Inc. is encouraging local bookstores to promote its Kindle electronic book reader and to sell e-books. The proposal is getting a chilly response from leaders of independent bookseller organizations who now cast Amazon as the category-killing played by bookstore chains like Barnes & Noble and Borders in the movie “You’ve Got Mail.”

The program is called Amazon Source, and it offers retailers that sign up to sell Kindle tablets in their bricks-and-mortar stores a 10% commission on any e-books customers purchase after buying one of the devices. Or, retailers can forgo the commission and receive a deeper discount on the manufacturer suggested costs of the Kindles (9% off versus 6% off with commissions), Amazon says. In either case, retailers also receive 35% off the manufacturer suggested price for Kindle accessories by signing up for the program.

“For many years, bookstores have successfully sold print books on Amazon—now Amazon Source extends this opportunity to digital,” says Russ Grandinetti, vice president, Amazon Kindle. “With Amazon Source, customers don’t have to choose between e-books and their favorite neighborhood book store—they can have both.”

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Amazon is allowing retailers to return any Kindle devices within six months of their first order through Amazon Source, it says. For now, the program is open only to retailers with physical stores, meaning the deals on Kindle bulk orders are not available for e-retailers. And only in 24 states may retailers receive commissions on e-book sales, Amazon says. It did not say why retailers in some states are not eligible for commissions.

The retailer did not immediately respond to a request for further comments about the program.

JJ Books, an independent book store in Bothell, WA, has been piloting the Amazon Source program. “Teaming up with Amazon to bridge the move to electronic books will help us find a means of long-term viability for our independent bookstore,” says co-owner Jason Bailey. “Kindle will help us bridge the evolution of the bookstore into the Internet age.”

Meanwhile Barbara Racine, book store manager at the University of Puget Sound campus book store in Tacoma, WA, which is also piloting the program, says she thinks students will like being able to buy Kindles in her store. “Being a small store sometimes hinders our options to sell technology devices, but Amazon Source made it very easy to sign up and place our first order,” she says.

While Amazon touts the success of pilot programs, other independent sellers are less than thrilled by the news.

“If Amazon thinks indie bookstores will become agents for the Kindle, they are sorely mistaken,” say Suzanna Hermansm and Steve Fischer, president and executive director, respectively, of the New England Independent Booksellers Association. “It is highly unlikely that our member stores will promote Amazon products after the havoc they have wreaked on our industry as a whole.”

The New England Independent Booksellers Association has more than 300 members from more than 200 bookstores in New England and parts of New York State.

Similarly, Oren Teicher, CEO of the American Booksellers Association, is dubious about the new program. “It appears that Amazon.com has again fashioned a program that benefits the retailer it cares about most—that is, Amazon,” he says. “Given Amazon’s aggressive corporate tactics and their long-standing strategy to avoid the collection of sales tax, we don’t see this new program as being at all credible.”

However, all ABA member book stores—of which there are more than 1,600—will make their own decisions about whether to participate in Amazon Source, Teicher says. The organization for more than a year has already had a deal with Rakuten Inc.’s Kobo division, which manufactures e-readers and provides content for them, he says. “Through ABA’s partnership with Kobo, hundreds of independent booksellers nationwide are offering their customers the ability to purchase either e-readers or e-books from them whenever they want to read digitally,” he says. “The Kobo program allows these booksellers to stay connected with their customers, who are supporting their locally owned bookstores—independent businesses whose diversity and economic contributions maintain the character and vitality of their communities.”

Kobo offers affiliates a 5% commission on e-book sales and a 10% commission on device and accessory sales, according to its web site.

Amazon is No. 1 in the 2013 Top 500 Guide and RakutenShopping.com No. 4. Japan-based parent company Rakuten is No. 2 in the Asia 500.